The Treasury Department has proposed rules defining what counts as issuing, offering, or selling payment stablecoins in the United States, and has asked the public to weigh in on how the new federal stablecoin law should reach cross-border activity. (TREAS-DO-2026-0496, 8/18/2026)
The Notice of Proposed Rulemaking (NPRM) sets out Treasury’s framework for implementing section 3 of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, P.L. 119-27, and builds on an advance notice the department issued in September 2025. It defines key terms left open by the statute and creates safe harbors for market participants.
“Treasury welcomes input from stakeholders as we work to provide the regulatory certainty businesses need to innovate and grow in America,” Treasury Secretary Scott Bessent said in a statement. The department is accepting comments for 60 days after the rule’s publication in the Federal Register, submitted through the federal eRulemaking portal.
GENIUS Act’s regulatory framework for stablecoins
Enacted in July 2025, the GENIUS Act establishes a federal framework for regulating payment stablecoins and sets rules for issuers and service providers in the U.S. market. The department has said the law aims to balance innovation with financial stability and consumer protection.
Beginning on its effective date of January 18, 2027, the Act will make it unlawful to issue a payment stablecoin in the United States without an appropriate federal or state license. A separate prohibition, effective July 18, 2028, bars digital asset service providers from offering or selling stablecoins to persons in the U.S. unless a licensed issuer created them. The NPRM seeks to clarify what it means to issue a stablecoin in the country.
Proposed rules define ‘issuance’ and ‘issuer’
The proposal defines “issue,” a term the Act leaves undefined, as the first transfer of a stablecoin by its issuer that results, or will result, in another person having the right to use, transfer, or redeem it. The definition captures indirect transfers and makes clear that an issuance occurs even if redemption rights are delayed. A reissuance after redemption counts as a new issuance.
The rules also define an “issuer” as the person obligated to redeem the stablecoin for a fixed monetary value and who represents that it will hold a stable value. Treasury said this focus on the redemption promise is critical for clarifying obligations in arrangements such as white-label products, when multiple parties are involved.
Defining ‘located in the United States’
The proposal provides a detailed test for when a person is “located in the United States,” a key factor in whether an issuance or sale falls under the Act. For an individual, the test turns on physical presence. A person is located in the U.S. if physically present, unless the person is not a U.S. resident and the presence is “merely temporary.” A U.S. resident traveling abroad temporarily would not be considered located in the U.S.
For a business, the proposed rule treats the entity as located in the U.S. if it is organized under U.S. or state law, or if it has its principal place of business in the country.
Safe harbors for foreign issuers, service providers
The proposal establishes safe harbors to help foreign issuers and service providers avoid inadvertently violating the Act. A foreign issuer would be treated as not having issued a stablecoin in the U.S. if it meets four conditions: it is not located in the U.S., reasonably believes the recipient is not located in the U.S., has adopted policies to avoid issuing to persons in the U.S., and does not advertise in a way that targets U.S. persons.
A similar safe harbor covers digital asset service providers. The rules can let a provider rely on a foreign issuer’s representation that it complies with the Act, such as its technical ability to follow lawful orders, if the provider conducts reasonable due diligence. Treasury expects that diligence to include confirming no prohibition on secondary trading under section 8 of the Act is in effect for the issuer. A provider cannot rely on a representation it knows, or should know, is false.
Treasury said it is also weighing alternative approaches, including one modeled more closely on Regulation S under the Securities Act, and is seeking comment on which would be more workable.
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